It appears that centrifugal forces in Europe are continuing to come apart. Rick Rule raises some important questions to consider as the EU further unravels. With an end to the European Free Trade Zone, how will the world economy deal with a contraction in the European economy? The credit ratings of countries likely to leave the union could be substantially worse. How will they monetize the deficits? How much savings and investment hesitancy will people have in anticipation of the first two consequences?

If Italy votes to leave, it could have a further beneficial impact on the US economy. At least a trillion euros will likely leave Europe and come to US in the next 12 to 18 months. In the near term this will be bullish for both the US dollar, and for gold. What we’ve enjoyed in the gold equities market this year was too far, too fast- and the 2 ½ month pullback we are seeing now is normal and healthy. Rick thinks that given the weakness in other currencies, the dollar may be relatively strong for 10-18 months, and in it’s decline- gold should do very well.

The certainty of commodities seems like the place to be right now. Jim Rickards will soon release his new book “The Road to Ruin” which highlights from many angles, an inevitable market crash in the next few years due to the complexity of derivatives. Jim’s background as counsel for long-term capital management gives him a unique view into the workings of the financial services industry. Rick believes that even if the crash isn’t a certainty, it’s certainly a contingency worth insuring against.